Page 118 - IC26 LIFE INSURANCE FINANCE

Government Grant Dr.

To Fixed Assets

(When grant is equal to book value of asset, fixed asset is shown at nominal value.)

OR, shown as reserves

When no future obligations are to be fulfilled

Bank A/c Dr.

To Gov. Grant

Gov. Grant Dr.

To Capital Reserve

When grant requires fulfilment of certain obligations

Bank A/c Dr.

To Gov. Grant

Gov. Grant Dr.(Should be credited to income over the same period over which the cost of

To P&L A/c meeting such expense is charged to revenue)

(In respective years)

The deferred income balance should be separately disclosed in the financial statement.

Grants related to revenue

Government grants related to revenue should be recognised on a systematic basis in the profit and

loss account over the periods necessary to match with the related costs, which they are intended to

compensate.

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